Last Modified: Tuesday, February 5, 2013 at 10:36 p.m.

Tea party members listen to speeches outside the Alabama Statehouse in Montgomery, Ala., Tuesday, Feb. 5, 2013. Several hundred tea party members gathered to express their views on the first day of the Legislature's regular session. (AP Photo/Dave Martin)

But they disagreed about the state General Fund budget for non-education agencies, such as prisons, courts, Medicaid and state troopers. Norris Green, director of the Legislative Fiscal Office, said the Legislature will have slightly less than this year to appropriate. Marquita Davis, Gov. Robert Bentley's finance director, said there will be slightly more.

Both agreed the Legislature is not facing the big budget cuts it did a year ago and Alabama's economy is slowly picking up.

But Green pointed out that neither state budget is back to what it was in the record spending year of 2008, which was the one before the recession forced state tax collections to dwindle and unemployment to increase. He also said the forecast for the new fiscal year could change if Congress makes big spending cuts, particularly in defense, which is a major part of Alabama's economy.

The Legislature started its 2013 session Tuesday and will meet until mid-May to address hundreds of bill, including writing the state education and General Fund budgets for the fiscal year starting Oct. 1.

Green said revenue for the education budget should grow by $238 million in the new fiscal year. That means the budget could increase from $5.55 billion this fiscal year to $5.79 billion in the new year. Davis predicted a slightly larger growth to $5.82 billion. She said the income and sales taxes that fund the education budget are increasing, and tax revenue set aside for public education “is robust.”

Green said revenue for the state General Fund budget should shrink by $28 million from $1.68 billion this year to $1.66 billion in the new fiscal year. Davis predicted revenue will grow to $1.74 billion. But she said several major funding sources, including insurance premium taxes and interest earnings on state deposits, have not recovered to their pre-recession levels.

On Wednesday, Davis will unveil the governor's recommendations for both budgets, but she said the suggestions for non-education agencies financed by the General Fund will be “relatively flat.” She said Bentley has tried to stretch spending in tough economic times by closing three mental hospitals and cutting about 5,000 state employees.

Senate budget committee chairman Arthur Orr, R-Daphne, said it looks like education employees could get their first cost-of-living raise since fall 2007. He said a raise of 1 percent to 1.5 percent appear likely, but there doesn't appear to be enough money in the General Fund to give state employees a raise.

On the General Fund side, state court administrator Rich Hobson said level funding for the court system would be harmful. He said the system has cut 270 employees in the last two years. Forty were juvenile probation officers, and most of the rest worked in circuit clerks offices. He said funding for the court system is 27 percent less than it was in 2002.

Despite the good news Tuesday for the education budget, Green and Davis noted that Alabama still isn't back to the glory days of 2008. That year the education budget was $6.69 billion and the General Fund budget was $1.83 billion. Davis said Alabama's unemployment rate demonstrates why the state is still working to recover. The average unemployment rate was 5.1 percent in 2008 and 7.7 percent in 2012, she said.

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